The average price that computer manufacturers pay for a 128GB solid-state drive (SSD) dropped to $50 in the second quarter, while the average price of a 256GB SSD plunged to almost $90, according to research from DRAMeXchange.

Those prices are significant drops when compared to pricing in the first quarter of 2014, when a 128GB SSD had an average price of $77.20, and a 256GB SSD sold for $148. The decline has been steady, quarter after quarter, since then, according to DRAMeXchange data.

Of course, that's not what you or I would pay. The average retail price that consumers pay for a 128GB SSD is $91.55, and for an SSD in the 240GB to 256GB range, the price is about $165.34, DRAMeXchange's data showed.

Toshiba

The largest producer of NAND flash, Toshiba, announced this year the development of the first 48-layer, three-dimensional flash memory. The densest NAND to date.

Still, that's significantly less than what you would have paid two years ago or even a year ago, according to Jim Handy, principal analyst at Objective Analysis.

"Flash prices have been in a slow decline for the past year. They have come down about 25% since last June. Flash accounts for around 80% of the cost of the average drive, but remember that it's a higher share of higher-capacity SSDs, and a lower share of low-capacity SSDs," Handy said in an email reply to Computerworld.

The price for client-SSDs used by computer manufacturers has dropped steadily over the past year.

There are two components to SSD pricing, the flash memory cost and then the other components, such as the controller or integrated circuit that manages the read and write commands from the computer.

Other than increased SSD adoption, which spurs production and results in economies of scale and lower costs, there has been a conversion over the past few years from flash that stores two bits per transistor to products that store three bits. The more dense NAND flash memory is, the less it costs to produce SSDs with the same or more capacity.

The conversion from two-bit or multi-level cell (MLC) flash to triple-level cell (TLC) flash has dropped costs about 20% over the past year, Handy said.

"Controller prices seem to be falling at something closer to Moore's Law, or about 30%," Handy said.

Shrinking NAND size leads to lower cost

The latest research from DRAMeXchange, a division of TrendForce, indicates prices for internal SSDs are declining at an accelerated pace as the production of NAND flash also migrates to the 15 and 16 nanometer manufacturing processes. Previously, the width of transistors were in the 19-plus nanometer range: More density, lower production costs.

Flash manufacturers have also been stacking NAND flash transistors vertically -- so-called 3D NAND flash -- which further adds to its density and lowers production costs.

In the third quarter, the ratio of 3D-NAND flash products in shipments will start to increase and the market penetration of notebook SSDs will speed up. According to DRAMeXchange's projection, notebook SSDs' market penetration will be more than 30% for 2015 and will surpass 50% by 2017, taking over from hard drives that currently dominate the notebook sector.

"The [system manufacturer] market for client-SSDs has experienced a rapid price decline due to the increasing adoption of SSDs based on triple level cell (TLC) technology," said DRAMeXchange's assistant vice president Sean Yang. "Among the OEMs, Samsung Electronics Co. especially has been aggressively promoting TLC-based SSDs since their memory chips and controller chips are developed in house."

Starting in 2014, the rising price-performance ratios of Samsung's TLC products have led to a rapid expansion of their share in the system manufacturer market for PCs.

Additionally, SSDs that incorporate both 3D NAND and TLC technologies have completed the client verification process in the first half of 2015 and are set to begin mass production and shipments in the second quarter.

Shipments of TLC products will grow faster in the second half of 2015 when Intel Corp. introduces its latest processor platform, Skylake. Hence, other SSD vendors will be in a hurry to develop their TLC-based SSD products, and this in turn will drive the transition of NAND flash production to the 15nm and 16nm processing technologies.

DRAMeXchange expects TLC-based SSDs using NAND flash from suppliers besides Samsung will be sent to PC manufacturers for testing in the third and fourth quarter.

A push for faster interfaces

Intel is also becoming more active in ensuring its processors support different SSD architectures via different interfaces.

Another bit of good news for users is that chip manufacturers are ramping up production of higher speed interfaces based on the PCIe serial bus standard. According to DRAMeXchange, PCIe SSDs are steadily making inroads in the market that is dominated by interfaces belonging to the mature SATA 3.0 technology.

Both the MacBook Pro and MacBook Air laptop models adopted PCIe in 2014, encouraging other PC-manufacturers to design products with the same interface and urging NAND flash suppliers to develop SSDs that match the application.

The market penetration of PCIe interfaces is expected to reach around 20% over the next year, based on DRAMeXchange's projection.

With Skylake and subsequent Intel processor platforms supporting SSDs with PCIe interfaces, SSD controller chip vendors will roll out more related, price-competitive integrated circuits. The SSD market therefore will see a noticeable increase in the share of products with PCIe interfaces next year.